CreditAccess Grameen Ltd. said its liquidity position was “quite good” even as lenders stop loan collections amid a national lockdown to combat the coronavirus pandemic.
“More than 46 percent of our borrowings are two-to-six-year term loans, so repayment stress is quite low,” Udaya Kumar Hebbar, managing director and chief executive officer at the microfinance lender, told BloombergQuint in an interview. “We don't see a liquidity challenge for us.” The lockdown, he said, affected mostly urban players where its impact is most severe.
Microfinance Institutions Network—an association for the microfinance sector in India—has asked all the members to inform customers that collections will resume only after the lockdown ends and that they should keep the instalment money with them.
Hebbar, however, said the economic impact of the lockdown would not be too harsh as local consumption remained healthy for rural microfinance firms like CreditAccess Grameen. Also, additional government support through direct benefit transfers and food security programmes will further reduce the impact on microfinance businesses, he said.
WATCH | CreditAccess Grameen's Udaya Kumar Hebbar On Covid-19's Impact On Microfinance Sector
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
